Alitalia Hires Bankers To Tackle Cash Crisis
Struggling Italian airline Alitalia has hired boutique investment bank Leonardo to help tackle a liquidity crisis that may see it running out of cash before year's end.
The move is aimed at finding ways to raise more than EUR€400 million (USD$527 million) to keep the loss-making carrier afloat, a source familiar with the situation said.
Alitalia has struggled to make a profit throughout its life and has been bailed out repeatedly by the Italian state.
It agreed salary cuts with unions in June and its chief executive and board members reduced their pay by 20 percent ahead of the drawing up of a new strategic plan.
The airline, which quadrupled its net loss to EUR€280 million in 2012 compared with the year before, said in July it needed EUR€300 million this year to keep running but expected to break even by 2015.
The airline, which is 25 percent owned by Air France-KLM, was rescued from bankruptcy in 2008 and bought by a consortium of Italian companies including bank Intesa Sanpaolo, road operator Atlantia and holding company IMMSI, the owner of scooter-maker Piaggio.
The investors might sell out after the expiry in mid-October of a lock-up period, paving the way for new shareholders.
Alitalia said in a statement it had hired the bankers to "assist the company in its relationships with the banks."
Italian newspapers said last month Alitalia was in talks with Etihad Airways on a commercial deal that might lead to the Abu Dhabi carrier taking a stake.
Alitalia and Etihad were also mentioned in the context of a possible tie-up earlier this year, but Etihad said at the time there were no talks between the two firms beyond those on code sharing.
Etihad was not available for comment but a source at Etihad said that, with a stake in Air Berlin and a commercial partnership with Air France-KLM, Etihad was not keen on another investment in a European carrier.
Alitalia earlier this year hired turnaround specialist Gabriele del Torchio to lead it back to profit.
The airline has pushed back to the end of September the approval of its mid-year financial statement, that was due to be approved by the board, mainly to address a tax dispute.